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GUIDE ON

PRIVATE LOTTERIES DUTY

Copyright @ IRAS 2015 All Rights Reserved

PRIVATE LOTTERIES DUTY

1

Topics

• Introduction to Private Lotteries duty

• Record keeping and filing requirements


• Accounting for cashless wagering

• The role of external auditor

2

What is Private Lotteries Duty

Private lottery - a lottery offered only tomembers of clubs whereby money is allottedin any manner depending upon chance or lot

(For example: Fruit machine operation, Lucky


(For example: Fruit machine operation, LuckyDraws).

Private Lotteries Duty – a duty payable by aclub for promoting the lottery

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Fruit Machine Lucky Draw,

Tombola

Private Lotteries 9.5% x (Turnover – 30% x (Sales – GST

How is Private Lotteries (PL) Duty

Computed


Private Lotteries

Duty

9.5% x (Turnover –

GST Chargeable)

30% x (Sales – GST

Chargeable)

GST Chargeable 7/107 x (Turnover –

Total Winnings Paid)

7/107 x (Sales – Cash

Prizes)

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Computing PL Duty for Fruit Machine

• Turnover:– The amount of bets wagered.

– The amount can be obtained from the fruit machine’ssoft meter printout and hard meter reading.


– A $1 betting capital may generate more than $1 inturnover – this happens when the player places morebets with his winnings.

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Computing PL Duty for Fruit Machine• Total Winnings Paid:

– The amount which is paid out in money, vouchers (TITOs) orelectronic credit transfer to a player as an outcome of him placing abet on the fruit machine

– Includes:• Increments recorded on Total Win meters

• Payouts through linked jackpot system.


• Payouts through linked jackpot system.

Example: Cascade (which are not captured in the Total Win meters)

• Redemption of expired TITOs

– Excludes:• Non-monetary prizes

• Winnings that are not paid out to players

Examples:

i) Expired TITOs

ii) Unclaimed winnings

iii) Unclaimed credits left in machines

6

Computing PL Duty for Fruit Machine

• Linked Jackpot System:

– a.k.a. Cascade, Progressive Jackpot,

Bonusing system, Mystery Jackpot

– Links multiple machines together to offer additionaljackpots to players


jackpots to players

– These jackpots are usually not an integral part of the gamethat is hosted in the fruit machine and as such, the payoutsare usually not captured in the Total Win meters

– When the payouts are excluded from the Total Winmeters, they can be included to form part of the TotalWinnings Paid to work out the GST Chargeable

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Record keeping and filing

requirements


requirements

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Duty reporting process

1. On the reporting date of the month

2. Generate soft meter printouts and take down the hard meter readings

in the presence of auditors

3. Conduct cash and hopper counts

6. Fill up Form PL-R1


4. Gather the hopper refill slips, the jackpot payout and handpay

slips

5. Proceed to service, replace or reconfigure fruit machine (if any)

6. Fill up Form PL-R1 using the hard and soft

meter readings. Get auditors to review based

on the checklist

7. Fill up Form PL-R2 using the Cash Count, Hopper Count, Hopper

Refill and handpayfigures

8. Fill up Form PL-R. Get mgmt staff to endorse

9. Submit PL-R, PL-R1, and make payment by 14th of the following

month

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Records to be kept

-Soft Meter print outs

- Hard Meter reading records

-Audit checklist

-Cash count records

-Bank in slips

-Hopper count records

2. Generate soft meter

printouts and take down

the hard meter readings in

the presence of auditors

3. Conduct cash and

hopper counts


-Hopper refill slips

-Jackpot payout and handpay slips

-System reports for Cashless In and Out, handpay

- Investigation findings (Technician Report) for variances on PL-R1 and PL-R2

-Soft meter print outs for meter resets, replacement

-Hard Meter Seal Register for meter or machine replacement

4. Gather the hopper refill

slips, the jackpot payout

and handpay slips

5. Proceed to service,

replace or reconfigure fruit

machine

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Records to be kept

• For at least 5 years

• There are penalties for failure to comply with


• There are penalties for failure to comply with

the record keeping requirements

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Documents to submit/maintain

6. Fill up Form PL-R1


6. Fill up Form PL-R1 using the hard and soft

meter readings. Get auditors to review based

on the Checklist

7. Fill up Form PL-R2 using the Cash Count, Hopper Count, Hopper

Refill and handpayfigures

8. Fill up Form PL-R. Get mgmt staff to endorse

9. Submit PL-R, PL-R1, and make payment by 14th of the following

month

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Documents to be submitted

What to submit When to submit To note

Form PL-R

(Private Lotteries Duty

Return)

• By 14th of the

following

month

-A nil return is required even when there is no

lottery conducted during the reporting month


Form PL-R1

(Reconciliation of Soft

and Hard Meter

Readings)

• By 14th of the

following

month

-PL-R1 is not required if there is no fruit machine

operations for the reporting month. Please

notify IRAS in writing 2 weeks before suspending

the fruit machine operations and state the

reason

-If there is a difference of > $5 between the soft

and hard meter readings, please provide the

explanation in the "Reason if meter difference >

$5" worksheet and submit it to IRAS

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Documents to be submitted

What to submit When to submit To note

Form PL-R2

(Reconciliation of Meter

Readings and Actual

Cash Flow)

• Upon IRAS’ request


Cash Flow)

Audit Checklist for Form

PL-R1

• By 14th of the

following month

only when audit

exception is noted

-If no audit exception is noted, please keep

and submit the checklist upon IRAS’ request

-If the club is issued with the full Auditors’

Report, there is no need to submit it to IRAS

Audited Financial

Statements for the year• Annually within 6

months from club’s

financial year-end

-If the PL lottery revenue figures in theaudited financial statements do not agreewith the club’s duty submissions for thatyear, please provide the reconciliationworkings.

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Locating the PL-Forms on IRAS’

websiteStep 1: Go to IRAS’ Homepage at

www.iras.gov.sg

Copyright @ IRAS 2015 All Rights Reserved 15

FormsStep 2: Under Quick links, select

“Forms”


website


Step 3: Select “Other taxes & services”


website


Step 4: Select “Private lotteries duty”


website

Private lotteries duty


Private lotteries duty

Form PL-R1Reconciliation of Soft and Hard

Meter Readings


Meter Readings

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Filling up Form PL-R1

Fill in the club’s particulars and reporting

date

Fill in the Turnover and Total Win soft meter

readings using the soft meter printouts

Fill in the recorded Turnover and Total Win

hard meter readings


Get the technician to check machines with > $5

difference in soft and hard meter readings

Complete the worksheet "Reason if meter difference > $5"

If there are linked jackpot payouts, fill up the

Jackpot Prizes Awarded box

Club’s staff to certify that the records are correct

Auditors to review the form using the audit checklist as a guide

Auditors to provide their particulars on Form PL-R1 to indicate that the

review is done

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Accounting for meter reset

Key highlights:

• To account for the meter increments as if no

reset has taken place by adding up the meter


reset has taken place by adding up the meter

increments before and after the reset

• It is important to capture the meter readings

before the meters are reset

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Meter reset – Scenario 1

When there is no meter reset

30 Jun 30 Jul

Turnover 5 000 Turnover 9 000


Total Win 4 000 Total Win 7 200

On Form PL-R1 for July

Present Meter Reading Previous Meter Reading Increment

Turnover 9 000 5 000 4 000

Total Win 7 200 4 000 3 200

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When there is a reset during the month

30 Jun 30 Jul

Turnover 5 000 Turnover

Total Win 4 000 Total Win

18 Jul

A2A1

Before After

Turnover 7 300 0 1 700

Total Win 5 900 0 1 300


Total Win 4 000 Total WinTotal Win 5 900 0 1 300


Present Meter

Reading

Previous Meter

Reading

Increment

Turnover, A1 7300 5000 2300

Turnover , A2 1700 0 1700

Total on PL-R1 9000 5000 4000


Present Meter

Reading

Previous Meter

Reading

Increment

Total Win, A1 5900 4000 1900

Total Win, A2 1300 0 1300

Total on PL-R1 7200 4000 3200

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In the following month

30 Jul

Turnover 1 700

31 Aug

Turnover 9 800


Total Win 1 300

On Form PL-R1 for AugustAugust


Turnover 9 800 1 700 8 100

Total Win 8 500 1 300 7 200

Total Win 8 500

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When meter reset was done immediately after meter readings were recorded for the

reporting month July

30 Jun 30 Jul

Turnover 5 000 Turnover 9 000



Total Win 4 000 Total Win 7 200

On Form PL-R1 for JulJul


Turnover 9 000 5 000 4 000

Total Win 7 200 4 000 3 200

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When meter reset was done immediately after meter readings were recorded for the

reporting month July

30 Jul 31 Aug

Turnover 0 Turnover 4 800


Total Win 0 Total Win 3 900

On Form PL-R1 for AugustAugust


Turnover 4 800 0 4 800

Total Win 3 900 0 3 900

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PL-R1: Common mistake 1

Observation Correct way

For older machines, the meter

readings on the soft meter

printouts are recorded in

credits.

To convert the meter readings in credits to

dollars equivalent.

Example:


credits.

Clubs did not convert the

credits to dollars equivalent

when reporting the meter

readings in PL-R1

Example:

Machine #2 with $0.20 denom.

Turnover (in credit): 65 000

Turnover (in $): 65 000 x $0.20 =$13 000

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There was a meter rollover

*and the prefix “1” was not

removed in the following

month’s opening meter reading

figure in PL-R1.

Step 1: Add a digit “1” to the left of the

present meter reading in the month when

the rollover occurs

Mar 13

(Turnover)

Present

meter

Previous

meter


figure in PL-R1.

*It occurs when the meter

reading exceeds the capacity of

the meter's display

Step 2: Remove the digit “1” in the

following reporting month

(Turnover) meter

reading

meter

reading

Machine #3 10000711 9999888

Apr 13

(Turnover)

Present

meter

reading

Previous

meter

reading

Machine #3 0012555 0000711

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Soft meter readings were not

accurately reported or not

supported by printouts as a result

of meter reset

�Where possible, soft meter readings before

and after meter reset should be printed and kept

to support the readings reported in Form PL-R1

�Care has to be taken when recording and

computing the correct Turnover and Total Wins

meter readings for meter reset cases


meter readings for meter reset cases

Note:

In the event soft meter printout cannot be generated

before the meter reset/ machine replacement, the club

may use the hard meter readings as the next best

alternative. It is advisable to put in place the procedure

for at least two authorised personnel to sign off the

records of the hard meter readings: the preparer who

records the reading and another person to witness it

before the reset/ replacement is done.

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Most clubs thought they were

required to maintain the Audit

Checklist for Form PL-R1 only

when there were exceptions noted

Regardless of whether there are exceptions

noted by the auditors, the club has to maintain

the Audit Checklist for Form PL-R1 for every

reporting month


when there were exceptions noted

by their auditors

reporting month

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Form PL-R2Reconciliation of Meter

Readings and Actual Cash Flow


Readings and Actual Cash Flow

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Reconciling meter readings and

actual cash flowPurpose:

• The net taking, which is the difference of all

monies in and monies out, of the machine


monies in and monies out, of the machine

is the same as

• The net result, which is the difference of all bets

(Turnover) and all winnings, of the machine

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Reconciling meter readings and actual

cash flowMonies In

Cash In

TITO In

E-Credit In

Bets (Turnover)

Game 1Winnings

Game 1 Net Result =


Monies Out

Cash Out, TITO Out

E-Credit out

Mini Jackpot

Net Taking = Monies In – Monies Out

Game 1

Game 2

Game 3

Game 1

Game 2

Game 3

Net Result =

Bets -

Winnings

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Reconciling meter readings and

actual cash flow

Activity Monies In Monies Out

Gaming Credits

before wagering

Bets /

Turnover Winnings Jackpot

Gaming Credits

after wagering

Player A inserts $60 cash $ 60.00 $ 60.00 $ 60.00

Bets $40 and Wins $30 $ 60.00 $ 40.00 $ 30.00 $ 50.00

Player A cashes out $50

cash $ 50.00 $ -


Player B inserts $20 TITO $ 20.00 $ 20.00 $ 20.00

Bets $10, Wins $45 $ 20.00 $ 10.00 $ 45.00 $ 55.00

Bets $50, Wins $5 mini

jackpot $ 55.00 $ 50.00 $ 5.00 $ 10.00

Inserts $30 TITO $ 30.00 $ 40.00 $ 40.00

Bets $20, Wins $30 $ 40.00 $ 20.00 $ 30.00 $ 50.00

Player B cashes out $50

ticket $ 50.00 $ -

Total $ 110.00 $ 100.00 $120.00 $ 105.00 $ 5.00

Net Taking = Monies In – Monies Out Net Result = Bets – Winnings - Jackpot

Net Taking = $110 - $100 = $10 Net Result = $120 - $105 - $5 = $10

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Filling up Form PL-R2

Fill in the club’s particulars and reporting

date

Count the machine’s cashbox and stackers

(notes, TITOs).Print the e-Credits In report from

the system

Fill in Cash Collected amounts

Calculate the manual


Calculate the manual payouts . Print the

Tickets Out and e-Credits Out reports from the

system

Fill in Handpay/ Cancelled Credits

amounts

Count the hopper. Calculate the amount of

hopper refill for the month

Fill in the Hopper Count and Refill amounts

Copy the Turnover and Total Win figures from

PL-R1. Fill in the jackpot awarded figure

Staff to investigate the variance and sign on the

form

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PL-R2: Common mistake


Data for “Cash Collected” and

“Handpays / Cancelled

Credits” (columns ([A] and

[B]) were extracted from soft

meter printouts

“Cash Collected” is the sum of:

�The money in the coin box and stacker

�Wagering Voucher (Ticket In) in the stacker

�Electronic credit transfer made to the machine


“Handpays/ Cancelled Credits” is the sum of:

�Manual Handpays that are processed by the

cashier

�Wagering Voucher (Ticket Out) from the machine

�Electronic credit transfers made to the players

�Jackpot prizes awarded (e.g. cascade payouts)

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Form PL-RPrivate Lotteries Duty Return


Filling up Form PL-R

Section I: Club’s Particulars

1. Indicate the name of the

clubhouse as per PL Permit


2. Change the status to

“Non-Registered” if you

are not a GST registered

club

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Section II: Computation of

Duty Payable

1. Copy figures for Line 1a,

1b(i) and 1b(ii) from PL-R1

PL-R1

$100.82

100


1b(i) and 1b(ii) from PL-R1

2. Drop the cents and enter

dollars only when doing so

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Section II: Computation of Duty

Payable

Line 1b(iii) – Adjustments

a. Adjustment dropdown list:

- Expired TITO tickets


- Expired TITO tickets

- Unclaimed winnings

- Unclaimed credits

- Redemption of Expired TITO tickets

b. For other adjustments, you may

manually enter your reasons in the

box directly

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Section II: Computation of

Duty Payable

1. Copy figures for Line 1f to

PL-R2

$80.22


1. Copy figures for Line 1f to

1j from PL-R2

2. Again, drop the cents and

enter dollars only when

doing so

80

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Section III: Declaration byperson making the Return

1. Form to be signed by thePresident, Hon. Treasureror a member of


or a member ofmanagement committee

2. Use only the latest versionof the form available atIRAS’ website

42

Accounting for cashless wagering

Cashless wagering can be in the form of using a:

- Ticket system (TITOs) or


- Ticket system (TITOs) or

- Card system (e-Credits)

43

Accounting for cashless wageringReporting in PL-R2:

Manual Records

Cash Collected

[A]

Handpays/ Cancelled Credits

[B]


[A]

$

[B]

$

TITO System Cash Counted + Tickets In Handpays + Tickets Out

Card System Cash Counted + e-Credits In Handpays + e-Credits Out

Tickets In, e-Credits In, Tickets Out and e-Credits Out have to be supported by the

cashless system printout reports

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The role of external auditor

• The auditor is required to perform a review of Form PL-R1

based on the minimum checks on the Audit Checklist for Form

PL-R1 issued by IRAS

• The auditor need not confine his work to these minimum


• The auditor need not confine his work to these minimum

checks

• The auditor is expected to exercise his professional judgment,

make enquires and/or perform additional procedures to clear

his doubts if there is anything to suggest that the particulars

and meter readings on Form PL-R1 are incorrect.

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The role of external auditor

• To indicate that the review is done based on IRAS’ minimum

checks, the auditor has to provide the following on Form PL-

R1:

-The audit firm's stamp; and

-The name of auditor or his representative who is involved in


-The name of auditor or his representative who is involved in

the review

• Clubs and their auditors should review any huge variances in

Form PL-R2 as these are signs that “something is not right”

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To recap the main points:

• Total Winnings Paid– Includes: Increments in Total Win meters, jackpot prizes

awarded

– Excludes: Non-monetary prizes, winnings not paid to players

• On record keeping and filing requirements


• On record keeping and filing requirements– Forms PL-R and PL-R1 are to be submitted by 14th of the

following month

– Audited Financial Statements are to be submitted within 6months from club’s financial year-end

– Form PL-R2, Audit Checklist and other source documents willhave to be kept for 5 years and provided at IRAS’ request

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• It is important to capture the meter readings before the meters arereset or replaced or the machine is decommissioned

• For PL-R2:– It is possible to obtain a nil variance between the two profit figures on

Form PL-R2. A variance indicates that something is wrong somewhere

To recap the main points:


Form PL-R2. A variance indicates that something is wrong somewhere

– For PL-R2, figures for “Cash Collected” and “Handpays/ CancelledCredits” columns are based on actual records, not meter printouts

• For PL-R:– Use only the latest version of the form available at IRAS’ website

– Drop the cents when entering the figures in Section II

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Thank you


This information aims to provide a better general understanding of taxpayers’ tax obligations

and is not intended to comprehensively address all possible tax issues that may arise.

While every effort has been made to ensure that this information is consistent with existing

law and practice, should there be any changes, IRAS reserves the right to vary our position

accordingly.

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